On 15th June, EU institutions reached a general political understanding on proposals for a regulation on import of ‘conflict’ minerals from any high-risk production area in the world into the EU region (here). This trialogue compromise between the European Parliament, the European Council of Member States and the European Commission is the next step in a long process started with a Commission consultation in March 2013. The resulting Commission proposal in 2014 was for a voluntary certification scheme for importers of minerals and metal, but the Parliament, after controversial debates, opted in 2015 for a mandatory scheme on importers of minerals, metals and manufactured products. The Council, who now have their say, has also been split on the best approach and agreement between all is required before finalisation of the regulation which will apply equally across Member States.

While this understanding on a framework is an important step, the political process is still not complete and may take many more months, with many key details still to be decided. From available information it appears that the regulation will build on the OECD Due Diligence Guidance for responsible supply chains (here) while to some extent deviating from that standard international framework. The OECD recently confirmed that this guidance applied to all minerals, yet the EU regulation remains focused on some, but not all, forms of tin, tantalum, tungsten and gold (3TG). An annex to the regulation is anticipated to include customs product codes that may bring some tin alloys and chemicals such as tin oxide into scope. The OECD recommends that all companies of all sizes in the supply chain perform appropriate checks on mineral supplies, yet the EU agreement seems to focus only on upstream mineral and metal suppliers and avoids regulation of downstream manufacturers. The compromise is also expected to exempt smaller volume importers of undefined size unlike the OECD guidance itself. Also to be determined are details on required audits in addition to those that already exist, disclosure of critical supplier business information to authorities and the public, and how effective enforcement can be performed.  EU product manufacturers subject to a separate Non-Financial Reporting Directive may be encouraged to report on their sourcing practices based on new performance indicators and a transparency database to be developed by the Commission. The Commission may also be asked to develop incentives to promote transparency yet it is unclear how these will be made relevant to the upstream minerals industry.

The campaign group Global Witness expressed disappointment with the trialogue (here) and Swedwatch concluded that the EU agreement falls short of international standards noting that the OECD Guidance includes obligations for downstream actors (here) . While the EU expects 20 smelters and refiners of 3TG in the EU to be most affected, ITRI believes that it is unlikely that any EU tin smelter/refiner is importing tin concentrate into the region, depending instead almost entirely on secondary feed sources or a potential few hundred tonnes of by-product from within the EU. ITRI also remains concerned with the likely complexity, cost and impact of the regulation, as well as the uncertainty in scope, both of covered product types and the location of potential ‘high-risk’ production areas.